Digital strategies evolving

12 November 2010

NEW YORK: Unilever, Procter & Gamble and Apple are among the companies succeeding in the "third generation of customer engagement", a study has argued.

Capgemini, the consultancy, estimated that consumer goods manufacturers generally allocate just 2% of their marketing budgets to digital.

Although this figure could reach 4% by 2014, it will still be inadequate given the potential opportunities.

One motivating factor behind such a shift is that Americans currently spend 20.8% more time online than in 2008, during which period TV only posted a 1.8% uptick.

The typical netizen also devotes 25 minutes to both social networks and email per week, while the web video audience expanded by 337% between 2003 and 2009.

Equally, the number of individuals accessing virtual coupons rose 92% in 2009, and the redemption rate for these vouchers hit 20%, measured against less than 1% regarding paper alternatives.

Overall, Capgemini said "digital marketing" should be replaced by "integrated digital services", in recognition of new media's power covering areas like e-commerce, co-creation and interaction.

It further asserted that the aim has gone beyond "telling" people about products using mass media, and advanced upon "listening" through loyalty schemes and market research.

"We are now moving towards the third generation of true customer engagement," Capgemini said. "This is characterised by 'talking', by engaging in open-ended dialogue with customers."

Cagemini's report praised Unilever's plan to double its digital expenditure, a move the FMCG giant intends to base on a "joined-up" strategy.

"I think we're in the same challenge with a lot of our companies. Are we giving our marketers the tools to be great in this area?," Keith Weed, Unilever's chief marketing officer, said last month.

"Go on to, we're still very corporate. That will change.

"We will [also] be taking a much more proactive stance in the area of YouTube, Facebook, etc, even at a Unilever corporate level."

Capgemini named Coca-Cola as a pioneer in connecting with customers online, such as via MyCokeRewards, enabling it to monitor habits and attitudes.

This platform allows over 12 members to enter codes from Coca-Cola's products and claim a range of items, which have included those made by Sony and Nike.

"By understanding their preferences and passions, we can identify consumers across brands and experiences," said Tara Scarlett, Coca-Cola's senior manager, CRM and precision marketing.

"We have a global view of where out data comes and goes, how we serve offers to each person, and how our systems interact with each other."

Elsewhere, Capgemini suggested Apple boasted particularly impressive internet customer services credentials, empowering people to book training, resolve problems, share comments and find further information.

This supplements strong satisfaction ratings recorded by Apple's physical stores, and differentiates the organisation from its peers.

"The reason that a lot of these companies don't copy Apple's customer service is they don't realize how important it is," said Ira Kalb, clinical marketing professor, USC Marshall School of Business.

"They look at it as a cost rather than a return on investment item."

Procter & Gamble was similarly lauded for the Connect+Develop programme, working with external firms to deliver new products, thus enhancing its $2bn (1.5bn; £1.2bn) annual innovation outlay.

"Many of our new products today, we designed using simulation and modeling … That gives us a much faster cycle and innovation," Robert McDonald, P&G's ceo, said recently.

"That $2bn is much more productive because of our open-innovation system with outside partners and also because we're using modeling and simulation and digitisation a lot more than ever before."

Data sourced from Capgemini; additional content by Warc staff